BlackBerry-maker RIM can’t survive as a standalone company while competitors from Apple to Google and Microsoft look to own the user experience – and revenue streams – across the board.

Research in Motion Chief Executive Officer Thorsten Heins speaks at the BlackBerry World event in Orlando in this May 1, 2012 file photograph. RIM can’t survive as a standalone company while competitors from Apple to Google and Microsoft look to own the user experience – and revenue streams – across the board, writes Carmi Levy.

By:Carmi LevySpecial to the Star, Published on Fri Jun 29 2012

Amid the red ink and the angst over Research In Motion’s slow-motion fall from grace, one simple truth has been largely overlooked: The company in its current form was probably doomed from the start.

Recent moves by RIM’s competitors suggest strongly that a smallish organization responsible for a limited range of devices and services is hardly equipped to survive in a world dominated by monoliths whose breadth and depth extend far beyond any one market segment.

Exhibits A and B are Google and Microsoft. Their just-announced tablets, the Nexus 7 and Microsoft Surface, respectively, are much more than new pieces of hardware. They’re signs that both these software leviathans are running scared. Google dominates the market for web services, while Microsoft owns the operating system and desktop software world. In a past life, this would have been more than enough to ensure countless years of ridiculous profitability. No more.

As Apple has shown time and again, those who own the entire ecosystem – device, operating system, online services, and app stores – end up making the rules. Microsoft and Google are trying to move beyond their respective software roots by vertically integrating themselves like Apple and solidly stamping their brand on every part of the user experience.

So forget the notion of a tablet war. It’s much bigger than that. It’s a platform war that’s already playing out on every conceivable device and service: PCs, smartphones, tablets, televisions, browsers, the web, you name it. And no one company can afford to be left out of any one of these platforms. Google is giving its Android operating system away so it can play gatekeeper, and control consumers and advertisers and the revenues generated from their increasingly sophisticated dance.

This leaves RIM in a tough spot because the world no longer has room for standalone players. You can’t simply make just smartphones or tablets and expect to survive. You need to be part of a wider ecosystem that creates end-to-end experiences for users, and end-to-end revenue streams. Even if RIM’s upcoming smartphones based on the BlackBerry 10 operating system are smash hits, they’ll be selling into a vacuum, great devices in a world where the device itself is only a small slice of the full user experience and revenue chain.

With RIM floundering from collapsing demand for obsolete products on one side, potentially new lifesaving products on the other that won’t start producing realizable revenue for at least 6 months, the strategic options to split or sell parts of the company start to take on more focus.

Samsung has had huge success selling Android smartphones and tablets, but in Google’s universe, it’s difficult to differentiate yourself from the rest of the Android-selling crowd. A Facebook hookup would be even more complementary, as RIM would give the social media giant the mobile capability and enterprise credibility it sorely lacks, while Facebook would give RIM all the services mojo it can handle. Microsoft? Its Nokia partnership suggests it’s off the market, but it’s knocked on RIM’s door before, and there’s enough synergy remaining to suggest it could do it again.

However the next few months play out, it’s unfair to continue chastising RIM’s past and present leadership for losing its lead. Converging market dynamics would have eventually forced their hand, anyway. The trick now lies in aligning RIM’s remaining core competencies with the suitor best equipped to turn them into the foundation for a broadly competitive business. This game is far from over.

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